Fine-dining restaurants commonly provide statements in their menus such as, "A 20% gratuity will be added to all checks for parties of six or more patrons." Given that this statement tends to raise the level of tips or gratuities left by other groups of diners, the statement is a good example of:
A) the endowment effect.
B) loss aversion.
C) anchoring.
D) none of the above

Question

Quizplus · Accepted Answer

The statement in the menu is an example of anchoring, which is a cognitive bias that describes how people tend to rely heavily on the first piece of information presented (the anchor) when making subsequent decisions. In this case, the statement sets a clear expectation of how much customers are expected to tip, influencing their behavior. The endowment effect and loss aversion are not relevant to this scenario.

Fine-Dining Restaurants Commonly Provide Statements in Their Menus Such As